What is Fixed Deposit (FD)?
Fixed Deposit (FD) is the most popular saving investment plan nowadays. It is a simple medium to save your money and gaining interest on that amount. The plan may be for short-term and long-term investments as per users' requirements. Before opening a Fixed Deposit(FD) account you must have to meet the eligibility criteria for it.
What is Mutual Funds?
Basically Mutual Funds are market-based investment instruments that have no fixed rate of return. It is popular among investors because it is easy to use in many ways. This investment scheme creates a group of people (investors) to their money in stocks, bonds.
Fixed Deposit v/s Mutual Fund-
There are different criteria on which one can decide the investment plan with Mutual Funds and Fixed Deposits:
- Return on Investment:- The Return on Investment for FD is fixed and guaranteed returns over a specific time period. But in case of mutual fund returns are totally based on the market( performance of the stock market).
- Risk- There is no risk in FD because the depositor is surely confirmed about the fixed returns. The chance of risk increases in the case of the mutual fund as it based on the performance of the stock market).
- Hidden Charges- There is no hidden charges while investing your money in FD. But mutual funds have some certain charges and expenses.
Conclusion:
Hence, now the answers to the question "where to invest" is easily simple. It looks good to invest in Fixed Deposit as compared to the Mutual Fund. As it has better return on investment, high interest on fixed deposit, no risk and also offers a source of safe income to the senior.
